Joint agreement with NEC allows Stratus to cut costs, staff

Crash-proof computer and server maker Stratus Technologies International Sarl announced that a research and development deal with NEC. Stratus also announced NEC's $9 million equity investment, which will enable it to cut staff and costs.

Stratus (Nasdaq: NIPNY) of Maynard, Mass. has about 750 employees worldwide, including about 450 in the Bay State, but the company isn't sure how many will be affected by the agreement, according to spokesman Ken Donoghue. Although incorporated in Luxembourg, Stratus' main office is in Maynard.

In a phone interview, Donoghue said the transition plan is expected to start around February.

"It's taking costs out of certain parts of the organization to free up assets to spend on other parts of the company and bring some down to bottom line," Donoghue said.

Stratus and NEC inked two decade-long joint product development and hardware purchasing agreements. The companies expect to cross-license technologies and collaborate on fault-tolerant computer servers, with Stratus focusing on software and NEC developing the hardware. The company expects to release the first jointly-created server in 2006.

NEC has also agreed to boost its equity stake in Stratus by $9 million, bringing NEC's ownership to three percent.

Although sales dipped six percent to $65.2 million during the company's second quarter, which ended on August 28, Stratus posted a $4.6 million profit compared with a $1.7 million loss in the same period last year.